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The Communicators

News/Business. People who shape the digital future.

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00:30:00

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Us 13, Abc 3, Univision 2, Gordon Smith 2, Smith 2, Nhk 2, Cbs 2, Oregon 2, Tokyo 2, Localism 2, Fcc 1, Nielsen 1, Hopper 1, Ted 1, Telemundo 1, Broadcasterrers 1, Nbc 1, Sandy 1, Britain 1, Ted Gotsch 1,
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  CSPAN    The Communicators    News/Business. People who  
   shape the digital future.  

    December 17, 2012
    8:00 - 8:30am EST  

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nonfiction books all weekend every weekend right here on c-span2. >> just ahead, the first of two forums from are -- from a recent -- [audio difficulty] >> host: welcome to "the communicators", and this is the first of several conversations we're going to have looking at the future of television. helping us to kick off this series is gordon smith, former senator for the state of oregon, current president and ceo of the national association of broadcasters. welcome, sir. >> guest: thank you. good to be back.
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>> host: also joining us for the conversation, ted gotsch of telecommunications report, serves as senior editor. senator smith, could you start by talking to us about how people watch television in the current day as say even opposed to fife years ago -- five years ago? >> guest: well, clearly, a lot is happening in telecommunications generally, and broadcasting is affected by that. we're sort of the original wireless, but we remain highly relevant because what we do tends, it is local, and as to those who want to get it the old-fashioned way, it is free. and yet you have satellite, you have cable, and now you have the internet through hulu and netflix and others that are other ways for people to access television. so television remains highly relevant to the future because when you look at the top hundred programs that are watched, 90 of them are broadcast content. and so i think the future of
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broadcast television is very bright, indeed. >> host: what are the challenges then looking forward and the future of? >> guest: well, i think the challenge for us is we want to be on every device for every person at every hour of the day. and we're a mobile society. and so the challenge is to make sure that we're on pads, computers, phones as well as the traditional viewing which is in the living room now on a wonderful hi-definition television screen. the other challenge we have, obviously, is that spectrum is a finite resource, and others want that resource, and yet there is not enough spectrum in the universe to do all video by broadband. and so our architecture of one to everyone in a location versus theirs there is one to one -- which is one to one, theirs will
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always fail because of of simply the transmission of video one to one. you can't do that. and i think the didder thing is we're in a highly regulated industry. when you compare the burden that broadcasters have versus cable or satellite or, obviously, the internet or the telephone companies, we are, we're the regulated one. we earn our licenses every day by all that we offer and the public obligations as to decency, as to children's content, as to public affairs and emergency warnings. these are all things that the public is able to take for granted but which, upon which they are very reliant. and i think appreciative when they recognize, okay, this is broadcast. this is not, this is live, this is local, this is free, this is important. >> so with the challenges as you listed them, what's the most
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important first step or steps you have to take going forward? >> guest: well, obviously, we're in uncharted territory with the fcc on the spectrum auction. the spectrum auction, the way they have designed it has really never been done before where you have a forward auction and a reverse auction, and i can't -- i think i can say with real confidence that none of the big networks are going to be volunteering to go out of business. i don't have a clue as to how many broadcasters who are on the edge financially who will say we'll take the money and volunteer to go out of business. our focus is that those who stay we want them to be held harmless, and we believe the legislation that the congress passed does have those kinds of protection. >> host: so is spectrum still the lifeblood of broadcast television even if it goes to other platforms and on demand and things like that? >> guest: of course. spectrum is one of the highways of the sky, and the way you have
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a channel without interference. for broadcasting that spectrum, we need it because we need elbow room. notwithstanding all of the regulatory environment we operate in. i wish you two could go with me to nhk labs in tokyo and see the incredible technological developments occurring in broadcast television. i'm not just talking about 4k, i'm talking about 8k, and i'm talking about television experiences of the future that people are going to want with and they're going to love. and so i think on the technology front if we're allowed our space, our elbow room, our future looks very bright indeed. >> host: ted gotsch of the telecommunications report, go ahead. >> thank you. senator smith, pretend you were to wake up 20 years from today. what kind of business model would be, would we be looking at for broadcast? i mean, with more people viewing things over the internet, some
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people are even questioning whether it's going to exist. what's your view on that? >> guest: well, it has to exist because, again, there's not enough spectrum to do video or television on a broadband basis. you can do, you can send a youtube and things like that, but if you start downloading, you know, a whole, tremendous amount -- all your television viewing -- it just simply will fail you. so our architecture in the end plus that thest free and it's -- that it's free and it's local, that's something that cable which is taped or time delayed or a satellite content similar that's not a local focus, it's not free. it's something you pay for, and it's something that in the end, you know, something like sports, i think it's really important to the american people that broadcasters continue to be the primary focus of sports communications because, um, you
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can't do it by broadband. it'll, the architecture will fail. and so i see that, the fact that it's local, the fact that it's live are the enduring strengths of broadcasting. >> and even though there's a lot of talk within telecom circles of looking to other areas for spectrum not only broadcast which, obviously, you're very familiar with, but maybe looking to the federal government to turn over more of the spectrum that they have have, you're still saying you don't think there's enough bandwidth to accomplish what mobile -- >> guest: well, you know, the government through the military and others, they still have, they have over -- they have half of the spectrum that's out there, and the problem is when you want to go get it from the government, particularly the united states military, they've got guns. [laughter] and they don't want to give it up. and ultimately, though, there are opportunities there that are not in the private sector that
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have been licensed since radio was first ip evented and then television -- invented and then television. we have half of what the telephone companies have. but the spectrum that we have, we're anxious to keep because that is your lifeblood. that's your seed corn. if you lose your spectrum, it means you've lost your channel, your license. it means you don't have a future. and, you know, i think we've just seen, for example, in sandy, the hurricane, when all of the broadband networks fail, the constant is broadcast radio and television. and if people have got electricity or if they can get it on a mobile device, they can see this stuff live. and sometimes that information that is transmitted can be a matter of life and death. >> do you think that, um, if not enough channels broadcasters come forward to volunteer spectrum, that the broadcast
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industry will look to congress to maybe put something in place mandatory to maybe force some of our smaller broadcasters to get out of the game and open up more spectrum? >> guest: you know, we have to be prepared for that. i think that that's certainly a possibility,, um, at the end of the day i think the world of tomorrow has to be a future of broadcast and broadband, and if it's just one, it will fail the american people. and if it's just one, all of the other public values like decency, like localism, like free, that goes away. and so when you want to, for example, if you're a sports team, if your university were in a bowl game that you wanted to watch but it wasn't broadcast, then you'd better have the right cable channel or subscription. you better be paying your bilker or you won't be watching the game. i don't think members of congress want to go there either. >> host: there was figures from
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nielsen that took a look at pure broadcast television watchers, this was in the third quarter of 2011, it totaled 5.8 million homes down from 6.2 million homes, do you still have eyeballs just for pure broadcast television? is. >> guest: well, yes, we think the number of broadcast-only homes is probably around 17 million homes, and when you look at second and third televisions, usually people don't want to be paying for two cable bills, and so they'll are a satellite or a cable television in the living room, but where they shave or in the kitchen they've got a broadcast television. but let's say, let's just limit it to 17 million. you extrapolate that to the number of people, it's probably approaching 50 million americans are dependent upon it. and those tend to be more of our minority communities, the
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economicically underprivileged, often the elderly and increasingly the young techies who are cutting the cable and who find enough on broadcast with multicasting and all of the new offerings of broadcasting. they say i don't have the time to watch any more than that, and such as i can't find over the airwaves, i'll get on hulu or netflix. by our studies it's growing, not decreasing. the cord-cutting phenomenon a real one. so, you know, we think cable is important. we want them to succeed. satellite's important, we want them to succeed. they can't succeed without broadcast content. that's why under retransmission consent they're increasingly willing to pay for the content without which they can't sell a television subscription. >> host: can a network just live on cable and not have to
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broadcast over the air? >> guest: don't -- i mean, they're not trying to. they want to be over the air. >> host: right. >> guest: and that's why there's so many owned and operateed stations that are owned by cbs or abc, because they understand that the gravitas of their marquee of cbs still has to have that local component, that local news, and, you know, with multicasting, they can go hyperlocal. you're seeing in a six megahertz license you can put four broadcast channels there now. and so you're seeing a lot of the minority community finding niche markets in multicasting. you're finding foreign language, you're finding religious broadcasters, full-time sports, full-time weather. all of these things are part of the new age we live in, and they come to you via broadcast. >> host: ted gotsch. >> the fcc released a notice
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proposed rulemaking on incentive auctions. how complicated do you see the process being? >> guest: i see it hugely complicated, and i think a lot of folks in and out of the fcc are scratching their head as to how this is going to work. but we want to be cooperative. i mean, if a broadcaster wants to go out of business and cash in, that's called freedomful we support that. and the fcc chairman has called it culling the herd. well, we don't want any of our heard culled necessarily, but if somebody wants to go out of business, they can. but i -- the problem in all of this calculation is that this is an urban problem. this is not a rural problem. generally speaking, the urban stations, the ones that they want to go out of business are not going to go out of business. they're not going to volunteer. and the areas where they're out to get people to volunteer tend to be in the flyover states. and they don't need their spectrum. and so how this is going to work matching buyers and sellers is
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going to be a whole new exercise, and we will be cooperative as long as it's transparent. as long as the congressional mandates are observed to hold harmless those who stay. we don't want interference. we want to stay on the air. there's a lot of people that count on us. whether they get it over the air or they count on it coming through a wire or bouncing off a satellite. >> the fcc has said that it wants to move rapidly towards or holding incentive auctions in 2014. your group has expressed concern that if commission rushes the process that it might not be done right. can you elaborate a little bit? >> guest: well, the way they're structuring this is they're going to say how many at this price will go out of business? they'll see who raises their happened, and then they'll say to the buying community, how many will buy at that price? and no one will know who's doing
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what but them in the middle, and then when they find out, okay, we don't need that spectrum, okay, how many will buy for this and how many will buy for that, and they'll try to come up with a patchwork model that clears a band for them. the other side of this which is concerning to us is, of course, a lot of powers will have to be moved as part of the repackaging of television stations, and that is, if this is not done correctly, you know, the dtv transition went from analog to digital, that'll look like sunday school class compared to the complexity of this. and millions will be disenfranchised from television if this isn't done properly. so, again, we're in uncharted territory. we know the will of congress, we know the goal of the fcc, we will be cooperative. >> host: a discussion about the future of television on this week's "communicators." our guest, gordon smith of the national association of
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broadcasters. he serves as their president and ceo. also joining us, ted develop of "telecommunications reports." talk about content. i can watch extreme home shows on abc, i can go to cable or elsewhere and watch a multitude of show on home ownership, home changes, whatever. you're faced with competition on that front. make the case that broadcasters still is the ability to compete and should? >> guest: well, notwithstanding the proliferation of all these channels, again i go back to what are people watching, and it is the high quality of broadcast content that keeps them coming back to broadcast channels. they may not even know they're on a broadcast channel, but that's what they're watching. 90 of the top 100 shows are broadcast. and as long as the economics of broadcasting are preserved, the content will be high, and that will attract ears and eyeballs, and that's, of course, the challenge with the proliferation of competition that's out there
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which so far we're doing fine with it. gls and you spoke of regulation. broadcast tv is regulated differently as far as cop tent when it comes to cable in. >> guest: oh, absolutely. i mean, you know, when we were kid, if you wanted to bring smut home, you had to sneak it past your mother. hope you didn't do that. today all you've got to do is hit the wrong channel, and you'll get all the garbage in the world coming into your house, so people need to be very careful about channel surfing. but if tear on a broadcast -- if they're on a broadcast content, there are community standards of decency that we have to observe which parents ought to be mindful of when it comes to the viewing of a family. i think that's good public policy. i know many of my members think their first amendment rights are somehow impinged by that. that said, it's also a very good advocacy point we make on capitol hill that there ought to be some place for the family to turn that observes localism,
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provides it for free to the viewer and that does have respect for community standards. we're not perfect. there's a fleeting expletive here or there, wardrobe malfunction, but we have technology that allows us time delay, there are ways that people can can be protected, and broadcasters are not in the indecency business. that's not our model. and i think ultimately that serves the american people. >> the, um, there's been a lot of talk from nab in the wake of the 2009 digital television transition about moving towards mobile dtv and multicasting, you mentioned this briefly before. how successful have those offerings been thus far, and in mobile tv in particular it seems it has taken a while for the mobile ecosystem and devices to be developed and why is that? >> guest: yeah. well, it simply takes time, but
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i can tell you on the market now it's called the dog l, you put it in your ipad, and you have an app for a broadcast station, you get that, and you get live airwaves, and you can watch it on your ipad. the future is mobile, and we will want to be on all these devices, and i'm absolutely confident we will be with this and other things that are coming along with mobile. and, you know, at the end of the day i think the broadcast and broadband with technology in the future will be interactive with one another, and it has taken a while for mobile, but we want to be in the backseats of cars, we want to be on your phone, we want to be on your ipad, and the technology is there to provide that. >> host: so is there still hurdles to cross especially as more tablets are sold? >> guest: it's just more education and making people available. and the ideal thing about watching video broadcast on your ipad, you're not billed
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streaming rates. you're not billed by the bit. it's free x. that's good, and it's live. so if you want to, you've got to leave the redskin game early last night and you wanted to plug in, you know, you could watch it in backseat of your car, or maybe your carr has a broadcast receiver in it. that's the future, and we recognize that, and we're going to be participant in it. >> host: we live with a digital video recorder, what does it mean for the future in. >> guest: i think it's here, it's going to be there. people want, you know, i'm often asked the question do people want their video live, or do they want it when they want it? and the answer is they want both depending on their schedule. and so we've got to fill that niche and make sure we're on every platform, every device at all times so that people have a choice if they're going to record it, they're going to watch it on their schedule. but some things you want to watch live, and we're there to provide that.
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>> host: and since the broadcasting industry depends on advertisers and advertisers don't want their commercials fast forwards through, what's the next steps? how do you capitalize on that particularly? >> guest: yeah. the hopper, that's a real challenge. cbs has told dish network we're not going to do business with you if you're going to continue to provide that because you're -- we're going to charge you a whole lot more in retransmission to make up for the loss of advertising, or you're not going to be able to do that because you're going right at the economic model of a broadcaster. and, you know, as long as we have revenue streams from advertising and retransmission consent, those get reinvested in the best content on television. >> host: tom. >> it seems apparent from discussions we've really come to a situation where it seems to many observers that we have broadcasts going up against the wireless industries.
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some washington observers have suggested that nab and broadcasters have begun to lose some of their clout, and do you feel that considering these continuing battles, discussions regarding spectrum and it usage, um, is -- how is nab positioned to sort of do battle with wireless industries over these issues? >> guest: well, what we do is for free to the consumer. what they do comes with a fee, and free is better than a fee. and if you want to talk to lawmakers -- and having been one myself, i can tell you when i wanted to talk to my constituents in oregon, i knew i could put up a cable ad, but i had to run it for a month before anybody saw it with consistency. i could put up an internet ad, and maybe a thousand people might see it if i'm lucky. but if i want to move numbers
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and communicate overnight with my constituents, where do i put my money? i put it on broadcast television. because that's where the eyeballs are. so i think we're well positioned to do battle with those who would hike to put us -- like to put us out of business. >> so even though, because certainly there seems to be a growing, um, feeling, you know, people -- the importance of broadband, the importance of wireless that this is the future of, you know, communications, and they're certainly pressing that, you know, we need to get ahead of the rest of the world and more spectrum and that leads to innovation and devices, um, are you facing headwinds even if maybe b the sheer numbers are adding up in your favor as you're explaining -- >> people get it over the air, they get it through satellite, cable or internet. tell me what about the telephone companies is local. i mean, what's local about their content? what's free about their content?
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their content is important, and people want to have access to it. that does not mean they want it to the exclusion of localism. we're the only country in the world that has a broadcast system that isn't like the bbc which is all the news you can get in britain. you've got cbs, you have abc, nbc and fox and telemundo and univision, and they have affiliates that go local and deep. that doesn't exist in other nations, and we, we have something pretty special. why would we want to destroy that just so that the telephone companies can take over more of what broadcasting does? would they take the regulations of a broadcaster? would they do local news? would they observe decency standards? would they do it for a much lower price? free? they're not going to do that. so when it comes to a lawmaker,
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he or she is going to say to themselves do broadcasters still serve a valuable public interest? and the answer is, yeah, you know, my kids like children's programming. and i like having a station that i'm not worried about them watching. and i like the fact that the underprivileged in our society can have it for free, and i like the fact that broadcasting is making an effort through multicasting to include all of the diversity of america so you have bounce tv that has niche programming to the african-american community, obviously, univision, telemundo have done a tremendous thing in providing content for the hispanic community. i think lawmakers in their heart of hearts understand that broadcasting does things for the american people, their constituents, that these other telecommunications devices are not willing to do and certainly are not regulated to do.
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but if you're going to get rid of broadcasting, whabt all those -- what about all those public policies that are served by broadcasterrers? aren't those valuable still? i think the answer is yes. >> host: how much clout do broadcasters have at the fcc? >> guest: i hope some because if you get rid of us, you get rid of their purpose. they listen to us, we will be to them. there's a healthy tension that exists between an industry and its regulator, but we work cooperatively with them. we simply value our industry because we think the american people do and, therefore, the fcc does as well. >> host: is there more emphasis to cable or over the top or any other type of programming rather than broadcasters at the fcc? >> guest: not that i know of. i mean, they have a -- they need to be fair to all, but again, i think our industry and not those other industries serve all of the public values that i've just
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spoken about. >> host: and aside from spectrum, are there any other regulatory issues that you could say to the fcc give us this or at least let us have some way that would help us be competitive in the future? >> guest: well, they have begun to wisely, i think, reck these that the ownership rules were designed in the days of "i love lucy," and now with all of the changes with preserving legitimate journalism, i think that they're trying to look at some loosening of the ownership rules so that a newspaper, a radio station, a television station can pool their resources, their capital to preserve good journalism. that's actually a very real threat in our society right now. if we had to look to the internet for all our news, um, i think a lot of people scratch their heads and wonder about its sufficiency, its credibility. and good news reporting is certainly dope in newspapers, and it's certainly, i believe, done in television stations.
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not the same depth, but importantly. and the ownership restrictions if they were loosened to a degree would allow good journalism through broadcast medium and also be helpful to the newspaper industry. >> host: ted gotsch, time for one more question. >> okay. what do you, again, you talked about this a little bit before, but what will the effects of time shifting and people viewing things over the internet have on linear program channels? >> guest: well, it's going to have an impact, but, again, i believe that broadcasters because of their architecture, because of the public's values they serve, because it's free and because it's local, we're a survivor. you know, when television came along, everybody said radio was dead. when the internet came along or cable or satellite, everybody said broadcast is dead. no, we're still very much alive
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and well in both radio and television, and because we have an architecture and a niche that is hugely important and, obviously, capturing the eyeballs of the american people. >> host: so as where you sit as the president and ceo of the national sexer of broadcasters, what's job number one for you going forward? >> guest: oh, the preserve of channels that are not interfered with in sufficient volume that we can innovate into the future and provide these remarkable new television experiences which are not just the near horizon, they're here. and within this decade you will see television sets the likes of which you cannot imagine, because i've seen 'em. i've been to the nhk labs in tokyo, and it's better than 3-d. got depth of field, it's got a clarity of picture. it's not even

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